Macquarie Bank, like many large companies which fear legal liabilities, doesn’t give out references to staff when they leave the investment bank.
Greg Ward, Macquarie deputy managing director and head of banking and financial services, was answering questions before the Senate inquiry into financial planning advice today.
He had heard some of the 11 planners reported by the bank to the corporate watchdog ASIC for misconduct were back working as planners.
“We don’t keep track of the staff once they leave Macquarie,” he said “Anecdotally I have heard that some of them are still working in the financial industry.”
Ward said Macquarie supports having a public register so the public could check the records of financial planners.
He was asked what the bank told prospective employers when they ask about former employees.
“We typically don’t give references on staff as a matter of corporate policy,” Ward said. “In these instances we haven’t been contacted by prospective employers about these individuals.”
Macquarie CEO Nicolas Moore also appeared before the Senate committee.
“We have absolutely no tolerance for wrong doing,” Moore said in response to questions about an adviser who was still employed after forging a client’s signature.
That staff member had made a minor change of address on documents. He had been counselled and had a financial penalty applied.
Moore first read a statement saying the bank sent out more than 189,000 letters to clients, both present and past, back to 2004.
The clients were told the advice they had received was under review. About 2,500 of these clients were considered to be at risk of having received bad financial advice from Macquarie.
About 820 had replied and 664 cases had been reviewed. Of those, so far 43 cases had been marked for compensation totalling $4.2 million.
ASIC, the corporate watchdog, has determined that Macquarie needed to address “systemic deficiencies” in its financial planning business including inappropriate advice.
Earlier in the hearings today, victims of poor financial advice called for a royal commission.
Whistleblower Jeff Morris, a former Commonwealth Bank employee, said the banks were avoiding scrutiny.
Ian Narev, the CEO of the Commonwealth, is due to appear before the inquiry later today.